(Please Note: The Attorney General Often Deviates From Prepared Remarks)
Thank you. It is good to be back home in Missouri, and it is a pleasure to join you here in Jefferson City.
Your meeting here is a reminder of the genius of our American system of government. We believe that it is the people who grant the government its powers. We believe that it is the people's values that should be imposed on the government, whether in Washington or Jefferson City, not government's values imposed on the people.
I know that many of you have been focusing on economic issues. In the past few months, we have seen record-setting economic growth. Consumer confidence remains high, as does the sense of Wall Street.
With this economic exuberance, it is sometimes easy to forget the challenges and threats this nation faced only 29 months ago.
First, there were the devastating terrorist attacks on our nation. Our enemies sought to decimate liberty, to undermine the rule of law and to disrupt free markets. Freedom-loving nations, in turn, banded together in defense of our ideals. Terrorists sought a world divided by hate and oppression, but instead helped to unite us.
Then, just as we were coming together to stand up to our enemies, our trust in a critical sector of our society our business leaders was shaken by revelations of corporate deception, fraud and malfeasance. A few individuals in whom we placed our trust, and who had a fiduciary obligation to us, betrayed that trust and that obligation. Many investors here and abroad questioned the security, stability, and honesty of American markets.
Two and a half years later, much has changed. We are winning the war against terrorism. Our nation is more secure and our people more safe. In Afghanistan and Iraq, we are spreading freedom to people who knew only tyranny. And we have made strides in restoring faith in the marketplace and integrity to the boardrooms of American businesses.
But challenges and threats to our economy and security remain. One of them, corruption in government and the corporate world, intersects both our security and economic concerns. It is a threat that has commanded my attention since my first days of service as Attorney General.
The 20th Century taught us forcefully that free people operating in free markets are the greatest force man has ever known for overcoming poverty and creating opportunity. The success of this system, though, depends on a marketplace of integrity.
Where such a marketplace does not exist, the outcome is tragic. Recently, at a United Nations conference on corruption, Kenya's minister of justice, the Honorable Ki Raitu Murungi said, quote, "[Corruption] has killed our children. It has destroyed our society. It is the fundamental cause of our high levels of poverty, unemployment and social backwardness. For us in Kenya, the fight against corruption is a matter of life and death."
When governments play favorites when they make decisions that favor the connected, rather than competition that favors the citizenry freedom is stymied. When corruption intrudes, the invisible hand that guides the market is replaced by a greased palm.
When inaccurate corporate reports mislead the many and enrich the few, a culture of greed contaminates our free and open markets.
Officials who pocket payoffs, and corporate officers who deceive, do not just violate the integrity of the marketplace. In the case of government officials, they deny their people better roads, cleaner water, and stronger schools.
Corruption facilitates and perpetuates such transnational criminal activity as organized crime, money laundering, drug trafficking, and the smuggling of human beings. Corruption provides sanctuary to the forces of terror, aiding the smuggling of biological, chemical or nuclear weapons materials.
Corruption draws the business community into a web of deceit and graft, making them co-conspirators in picking the pockets of ordinary people.
The unethical actions of corporate officers strangle innovation. Investors lose their savings. Employees lose their jobs. And the entrepreneurial spirit that drives economic growth is stunted because capital investment is less likely where there are doubts about a market's integrity.
Corruption saps the legitimacy of democratic governments. In its extreme forms, corruption even threatens democracy itself, because democracy lives on trust, and corruption destroys trust.
Perhaps worst of all, corruption limits the unique ability of all human beings to flourish in freedom. Freedom's greatest gift is the ability of every individual to fulfill his or her God-given potential. When corruption robs us of this gift, it diminishes each and every one of us.
Consider the impact corruption has on our economy, which in turn affects the global marketplace:
According to a Brookings Institution study of Federal Reserve Board data, between December 2001 and November 2002, corporate scandals cost the U.S. economy more than $40 billion in growth, more than $175 billion in lost retirement savings, and as many as one million jobs.
World Bank studies estimate that negative effects of corruption can reduce a country's economic growth rate by as much as a full percentage point each year.
The World Bank estimates that the cost of corruption represents about seven percent of the annual world economy, roughly 2.3 trillion dollars. This is a staggering amount a figure that is equal to the entire federal budget of the United States government.
Think of the jobs, the infrastructure, and the educational systems that 2.3 trillion dollars could provide if it were redirected from the personal enrichment of the corrupt to the public service of the people. Think of the rising tide of trust and productivity that would result a tide that would lift all citizens, especially the poor among us.
Shockingly, until recently, corruption and terrorism for that matter were viewed as regional problems beyond international discussion and cooperation.
In some European nations, bribes were actually allowed as tax write-offs, a cost to be deducted at home for doing business abroad. These governments engaged in the delusion that they could subsidize bribe-paying abroad while expecting these same companies to behave morally at home.
No society is free from corruption. Even the most successful and longest-established market societies experience corruption. For example, in 2002, the United States Justice Department dealt with more than 1,000 federal prosecutions of corrupt officials on the federal, state and local levels.
The goal of law enforcement, then, is clear: Equal opportunity in the marketplace must be defended. Confidence must be sustained. The marketplace of integrity must not be contaminated by a corrupt contagion of greed.
To be sustainable over time, the political will necessary to succeed against corruption requires a moral foundation. Economic and political interests may shift, but the morality of fighting corruption is a constant. It is common ground that all governments and private citizens can and should share.
But it is not enough just to talk about ending corruption; words must be backed by actions.
On the international front, the United States has been a leader in working with American businesses to develop corporate compliance codes and to establish ethical guidelines to fight bribery and corruption both here and abroad.
Our efforts culminated in a meeting two months ago in Merida, Mexico, where I was privileged to lead the American delegation in the signing of the U.N. treaty to combat corruption.
As evidenced by the 95 nations that signed the U.N. treaty, there is now a worldwide conviction that the crime of corruption which sacrifices prosperity for personal profit, and human achievement for human greed must be defeated.
Domestically, in the aftermath of the corporate collapses, and the actions of such firms as Arthur Anderson, President Bush called for a tough new cooperative approach to enforce our corporate fraud statutes. He formed the Corporate Fraud Task Force in the summer of 2002, which is administered by the Department of Justice.
The Bush Administration also worked with Congress on passage of the Sarbanes-Oxley Corporate Fraud and Accountability Act. This law gave federal prosecutors the ability to seek new criminal penalties for securities fraud, attempts to commit mail, wire, bank and health care fraud, certifying false financial statements, document destruction or tampering, and retaliating against whistleblowers.
Since the inception of the Task Force, the Department of Justice has investigated 354 corporate fraud matters involving 617 subjects.
Federal prosecutors have filed 290 corporate fraud cases in which 642 defendants have been charged with some type of corporate fraud crime.
Over 250 of these defendants have either been convicted or pled guilty.
We must use the tools of investigation and prosecution to bring the corrupt to justice, but we must also do more.
We know from our war against terrorism that it is not enough to act after attacks have been perpetrated. To defeat terrorism, we must prevent acts from occurring in the first place. Just as we cannot wait for the next terrorist to strike, we must not wait for the next bribe to be paid or the next stock to be shorted before moving to stop future corrupt activity.
Information and transparency are keys to achieving a world in which corruption
is not merely prosecuted, but prevented; not merely detected, but deterred.
Information is the enemy of corruption. Corruption feeds on secrecy and ignorance. It cannot thrive under the light spread by an open, informed society.
Today, with the explosive growth of the Internet and 500-channel digital satellite broadcasting, information has never moved more quickly, to more people, with more purpose. As our effort to deal with the corporate scandals has confirmed, information is the most therapeutic resource we have in achieving integrity in our markets and in our government.
When evidence of corruption is presented to the public, institutions are held accountable. In this way, open government becomes an essential tool to creating good government. Open boardrooms enhance open markets.
The corporate reforms undertaken over the past two years have created a greater sense of accountability on Wall Street. In the past 18 months, we have seen stock market indexes return to pre-corporate scandal levels.
Internationally, we are seeing some positive results from government transparency. For example, in 2002, when the government of Uganda published the amount of funds allocated to local school districts, the amount actually received by the schools rose from 28 percent to 90 percent.
Examples such as this show what can occur when a nation declares that corruption is no longer a part of doing business. It gives urgency to President Bush's call to government and business leaders to usher in what he calls a new era of integrity.
In the end, though, government alone cannot promote the opportunity and achievement that flourish in the absence of corruption. Business leaders and government leaders alike must set high ethical standards. If we do, we will turn a zero-sum contest of corruption into a framework of freedom that benefits all.
For with each word of leadership, with each act of justice, we send the unmistakable message that no executive is above the law, no government can be sold to the highest bidder, and no individual is beneath the opportunity to pursue a better, more prosperous life in a world of freedom.
Thank you very much.